Prop 13: Idiocy Comes Home to Roost in California

[one...two...tree 2,762]

....

Proposition 13 was cleverly designed to make it virtually impossible for California to raise taxes. Any tax increase requires a supermajority. Property taxes are fixed at 1% of assessed value, and assessments themselves are fixed at the time of purchase, and can rise only very slowly thereafter. This leads to all sorts of idiotic consequences. Back when I lived in California, one of the few ways of raising taxes available to cities and towns was to increase the sales tax by some fraction of a percent. Result? Cities and towns did this, and then tried desperately to induce people to set up car dealerships and other places where people sell big, expensive things. Did it make sense to have so many car dealerships? Who cares! It's revenue!

Likewise, people in California don't always sell their houses when it would normally make sense to do so, because as long as they stay in their existing house, the assessment will not rise much and their taxes will stay low, whereas if they buy a new house, it will be assessed at its purchase price, and their taxes will go up.

"Free markets", indeed.

My favorite Prop 13 anecdote: while she was alive, my grandmother lived in a wonderful house that she had (I believe) designed herself in the 50s or thereabouts, and built on what was then an undeveloped hillside. As time passed, however, that property became much, much more valuable, which makes sense since it was on the border between LA and Beverly Hills, on a delightful secluded street that ran up the hillside and dead-ended at the top. Phil Spector lived next door, and Eartha Kitt lived up the street.

Meanwhile, I had a good friend who lived in a house in a terrible neighborhood (as in: there were shootings nearby on a fairly regular basis.) The only famous person who lived near her was Rodney King. Her house itself was great, but it was also in a state of considerable decay when she bought it, and needed a whole lot of work.

Guess who paid the least in property taxes, by a considerable margin? My grandmother, of course. Having a cap on property assessments in place for decades will do that.

The result, of course, is that California has been deferring maintenance for a very long time. Now their judges will be working from home, their schools will fall further into decay, and their bridges will continue to crumble. With any luck, Obama's stimulus plan will help out with the worst of it; my only regret about that is that it will postpone the day when Californians have to confront the idiotic tax policies they put in place.

http://www.washingtonmonthly.com/

[Ban Hammer 12,838]

welcome to cali

[mox 298]

Yeah, Prop 13 has been a disaster. I'm originally from Colorado, where we had a similar law called TABOR, the "Taxpayer Bill of Rights." It caps taxation to the rates of inflation and population increase. It's been a complete disaster, much like Prop 13. I'm all for lower taxes, but when you completely tie the hands of government to bring revenue in when it needs it the most, that's just bad fiscal policy.

I love California, but we've got some huge problems right now, and Prop 13 is one of the biggest. OTOH, I don't live in a nut job state like Kansas where science curriculum are practically based on biblical readings.

Edited December 26, 2008 by mox

[peejay 327]

Poor grandma. They'll jack her taxes on the dreamhome and she won't be able to afford to live there anymore. She'll have to move to the dump next door to Rodney King. And a rich real estate mogul that can afford the higher taxes will move into granny's house. Social progress in action.

[Danno 1,228]

Poor grandma. They'll jack her taxes on the dreamhome and she won't be able to afford to live there anymore. She'll have to move to the dump next door to Rodney King. And a rich real estate mogul that can afford the higher taxes will move into granny's house. Social progress in action.

Now there ya go again, worrying about Old folks who who selfishly are trying to live out their golden-years in their own house.

INstead you should be worrying about freeing up the taxing schemes of left-wingers who will not tolerate limits on ways to raise taxes.

HOw are they gonna pay for research on the mating habits of snails ....or buy cable TV for inmates, if old folks won't pay "their fair share" in taxes?

[mox 298]

Poor grandma. They'll jack her taxes on the dreamhome and she won't be able to afford to live there anymore. She'll have to move to the dump next door to Rodney King. And a rich real estate mogul that can afford the higher taxes will move into granny's house. Social progress in action.

Now there ya go again, worrying about Old folks who who selfishly are trying to live out their golden-years in their own house.

INstead you should be worrying about freeing up the taxing schemes of left-wingers who will not tolerate limits on ways to raise taxes.

HOw are they gonna pay for research on the mating habits of snails ....or buy cable TV for inmates, if old folks won't pay "their fair share" in taxes?

Hey now, don't go dissin' cable TV for inmates. It's all part of a long-term plan. We're making them watch "####### Eye for the Straight Guy," which will turn them mostly gay. Then when they get out of prison they will spread out and start making everyone else gay. Pretty soon everyone will be gay and Prop 8 will have to be repealed.

So GTFO of your house granny, all those man butts aren't gonna hump themselves!!

[PlatyPius 5]

Poor grandma. They'll jack her taxes on the dreamhome and she won't be able to afford to live there anymore. She'll have to move to the dump next door to Rodney King. And a rich real estate mogul that can afford the higher taxes will move into granny's house. Social progress in action.

I have to agree with that. It has been her house for decades. Taxing her to point of her having to leave is just wrong.

Indiana, BTW, just this year passed something similar. We had two property reassessments lately, with the result of some people's property taxes doubling, tripling, even quadrupling the first time. The second time was a little better, with those rates only doubling at the most. I wasn't affected very much... mine have doubled since I acquired the house in 2001, but they still aren't very much relatively speaking ($1100/year). I know people, however, who had homes in certain parts of Indy, such as Broad Ripple (artsy district), who had property taxes that went from $2000/year to $10,000/year. They moved, of course.

Anyway, Indiana has also put a 1% cap on property taxes starting in, I believe, 2010. It's a screwed up mess of bills, laws, and measures. Get rid of property taxes. Get rid of local income taxes. Get rid of state income taxes. I can deal with Federal Income taxes and State sales tax. Stop throwing money at stupid-arsed things like the mating habits of the Elbonian Crotch Frog. Stop spending money we don't have.

That said, Indiana is actually in pretty good shape, financially. We leased off our toll road to the Ozzies and Italians, we have money in the bank, road projects going on (forever), a new airport in Indy, and a governor who - while maybe not as popular as he once was - is good financially for the state. Considering some of the things I've seen go on in California, government and money-wise, I can't say that I'm very surprised or sympathetic to their current money woes.

[Jasman0717 8]

That proposition was written by the northern politicians. Orange County, a fairly rich county, gets very little of the property taxes collected, it all goes up north. Orange is a donor county.

[mox 298]

I have to agree with that. It has been her house for decades. Taxing her to point of her having to leave is just wrong.

Agreed. We saw this a lot in Colorado too, where ranchers and farmers were driven out of their businesses that had been in the family for over a hundred years because the suburbs were expanding next to them and driving up property values. There really needs to be exemptions for people who have been in their property for more than x years, or who intend to live in their property for the rest of their lives, or for ranchers and farmers who meet some kind of "been in the family for generations" criteria.

[one...two...tree 2,762]

california battles mississippi for worst schools in america

back in the 70s, california used to be the envy of america. great public schools. tuition free universities. now.the state ranks among the bottom 5 states.

these articles about california's financial woes. like schwarzenegger terminating thousands of jobs because of the most recent budget crisis. always fail to mention proposition 13, passed in 1978 which doesn't allow the state to raise property taxes. property tax is perm. set at 1%.

section 1 of proposition 13 states: the maximum amount of any ad valorem tax on real property shall not exceed one percent (1%) of the full cash value of such property. the one percent (1%) tax to be collected by the counties and apportioned according to law to the districts within the counties.

http://thekrays.wordpress.com/2008/08/01/c...elated_content/

[csmith1216 1]

proposition 13 dont we pay more than enough in taxes already?

[Jasman0717 8]

My condo is down about 300k from what it was a year ago and I won't be getting any tax break

[csmith1216 1]

california battles mississippi for worst schools in america

back in the 70s, california used to be the envy of america. great public schools. tuition free universities. now.the state ranks among the bottom 5 states.

these articles about california's financial woes. like schwarzenegger terminating thousands of jobs because of the most recent budget crisis. always fail to mention proposition 13, passed in 1978 which doesn't allow the state to raise property taxes. property tax is perm. set at 1%.

section 1 of proposition 13 states: the maximum amount of any ad valorem tax on real property shall not exceed one percent (1%) of the full cash value of such property. the one percent (1%) tax to be collected by the counties and apportioned according to law to the districts within the counties.

http://thekrays.wordpress.com/2008/08/01/c...elated_content/

Do you own your home?

[mox 298]

proposition 13 dont we pay more than enough in taxes already?

Your infrastructure is crumbling, your children aren't being educated, you don't have enough police or firemen to meet the current needs, your levies are completely out of date, and the government is about to be shut down because it can't pay its workers. So...actually no, I don't think you're paying more than enough taxes already.

[csmith1216 1]

proposition 13 dont we pay more than enough in taxes already?

Your infrastructure is crumbling, your children aren't being educated, you don't have enough police or firemen to meet the current needs, your levies are completely out of date, and the government is about to be shut down because it can't pay its workers. So...actually no, I don't think you're paying more than enough taxes already.

they could taxes us 20% more and they would find a way to spend it all on things we dont need, then ask for more.